Sample Business Contracts

Research Agreement - EntreMed Inc. and Cytokine Sciences Inc.

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                               RESEARCH AGREEMENT

         This Agreement is effective July 2, 1996 (the "Effective Date") by and
between EntreMed, Inc. a Delaware Corporation located at 9610 Medical Center
Drive, Rockville, Maryland 20850 ("EntreMed") and Cytokine Sciences, Inc. a
Delaware Corporation located at 4860 North Broadway, Denver, Colorado 80216

         WHEREAS, EntreMed desires to fund certain work to be performed at
Subsidiary in exchange for certain rights to use the results of such work; and

         WHEREAS, Subsidiary desires to receive such funding and is willing to
grant the rights desired by EntreMed.

         NOW THEREFORE in consideration of the mutual promises and other good
and valuable consideration, the parties agree as follows:

         SECTION 1.         - DEFINITIONS

         The terms used in this Agreement have the following meanings:

         1. The term  "Affiliate"  with  respect  to any  party,  shall mean any
individual, partnership, corporation, group or trust that directly or indirectly
controls,  is  controlled  by or is under common  control with such party,  with
"control"  being the power to direct or cause the  direction of  management  and
policies,  whether  through  ownership  of voting  securities,  by  contract  or

         2.  The term  "Agreement  Year"  shall  mean the  twelve  month  period
beginning  on the  Effective  Date  and  each  subsequent  twelve  month  period




         3. The term  "Research"  shall  mean  research  into the  treatment  of
disease by stimulating cellular immunity.

         SECTION 2.         - FUNDING

         1. In  consideration  of the  undertaking  of Research  by  Subsidiary,
EntreMed shall make annual research grants to Subsidiary as follows:

         (a) In the first  Agreement  Year the grant  shall be  $600,000  (which
         shall  be in  addition  to the  capital  investment  in  Subsidiary  by
         EntreMed of $250,000),  less the amount of any payments  contributed by
         EntreMed for Research at Innovative Therapeutics,  Inc. since March 31,

         (b) In the second Agreement Year the grant shall be $1,000,000; and (c)
         In the third Agreement Year the grant shall be $1,500,000 provided that
         EntreMed,  in its sole discretion,  may terminate  Research and funding
         for Research  sixty (60) days prior to the end of the second  Agreement
         Year or at any time  thereafter on sixty (60) days prior written notice
         to Subsidiary.

         2. Each annual  grant shall be paid in four equal  quarterly  payments.
The first payment shall be paid upon the Effective Date.

         3. At least sixty (60) days prior to the end of an Agreement  Year, and
for the first  Agreement  Year as soon as practical  after the  Effective  Date,
Subsidiary  shall  submit to EntreMed for its approval a plan and budget for the
use of the funding for the following Agreement Year, which approval shall not be
unreasonably  withheld.  In  addition  within  sixty  (60) days of the end of an
Agreement Year Subsidiary shall provide EntreMed with an accounting of the




expenditure  of  Research  funds  for  such  year.  Any  funds  granted
hereunder  which have not been expended by Subsidiary  within the Agreement Year
shall be retained by Subsidiary for Research.

         4. During the period in which  EntreMed is funding  Research under this
Agreement,  Subsidiary may not, without  EntreMed's  consent (which shall not be
unreasonably withheld),  seek or accept funding from a commercial sponsor in the
fields of Immunology, T Cell Immunity,  Transfer Factor, Herpes, Viral Diseases,
bacterial diseases and fungal diseases.


         1.  Beginning  on the  Effective  Date  and  thereafter  unless  sooner
terminated  Subsidiary  shall:

         (a)  Conduct  Research  and apply the funds paid by EntreMed to support
         the expenses of Research and shall use reasonable efforts and diligence
         consistent with  professional  standards to achieve the goals set forth
         for such Research;

         (b)  Promptly  and  regularly  disclose  to  EntreMed  information  and
         inventions  resulting  from Research and EntreMed  shall be entitled to
         use such information and inventions for research  purposes only and not
         for other  commercial  purposes  unless in  accordance  with a separate
         agreement between EntreMed and Subsidiary;

         (c) For the  purpose of  facilitating  disclosure  of  information  and
         inventions permit duly authorized  employees of or  representatives  of
         EntreMed to visit the  laboratories and other facilities where Research
         is conducted at reasonable times and with reasonable notice;



         (d) Promptly  advise  EntreMed of  Subsidiary's  intent to file and the
         filing, allowance and issuance of patents; and

         (e) At EntreMed's  request  provide  EntreMed with samples of materials
         produced in the Research  which may be used by EntreMed in its internal
         research only and not for other commercial purposes.

         2.  Subsidiary  shall,  on a continuing  basis,  advise EntreMed of the
results  of the  Research  and at least  once  every  three (3)  months  provide
EntreMed with written  progress  reports  concerning  Research.  A final written
report  setting forth in detail the results  achieved  under and pursuant to the
Research  shall  be  submitted  to  EntreMed  within  thirty  (30)  days  of the
termination of the Research.

         3. Notwithstanding anything else to the contrary, Subsidiary agrees not
to publish or disclose to third parties  results of Research  without  supplying
EntreMed  with a copy of the  material to be  disclosed  or  published  to third
parties  at least  thirty  (30) days  prior to  submission  for  publication  or
disclosure so that EntreMed may evaluate such material to determine  whether the
material contains patentable subject matter on which a patent application should
be filed or contains EntreMed Confidential  Information.  At EntreMed's request,
Subsidiary  will delay  publication  and/or  disclosure  and will cooperate with
EntreMed in assuring that such publication or disclosure is in the best interest
of Subsidiary and EntreMed.





         1. This  Agreement  shall not be  assignable  by either of the  parties
without the prior written consent of the other party (which consent shall not be
unreasonably withheld),  except that each party without the consent of the other
may assign this  Agreement  to an  Affiliate  or to a  successor  in interest or
transferee of all or  substantially  all of the portion of the business to which
this Agreement relates.

         2. Subject to the  limitations  on assignment  herein,  this  Agreement
shall be binding  upon and inure to the benefit of said  successors  in interest
and assigns of EntreMed  and  Subsidiary.  Any such  successor  or assignee of a
party's  interest shall  expressly  assume in writing the performance of all the
terms and  conditions  of this  Agreement to be performed by said party and such
Assignment  shall not relieve the Assignor of any of its obligations  under this

         SECTION 5.         - TERMINATION.

         1. Except as otherwise  specifically  provided  herein,  this Agreement
shall  remain in full force and  effect  for three (3) years from the  Effective

         2. Upon material breach of any material provisions of this Agreement by
either  party to this  Agreement,  in the event the  breach is not cured  within
sixty (60) days after written notice to the breaching  party by the other party,
in addition to any other remedy it may have,  the other party at its sole option



may terminate this Agreement, provided that such other party is not then in
breach of this Agreement.

         3. The  obligations  of Section  3.1(b)  and (e) and  Section 6 of this
Agreement shall survive any termination of this Agreement.

         SECTION 6.         - CONFIDENTIALITY.

         1.  During the term of this  Agreement,  it is  contemplated  that each
party  will  disclose  to the other  proprietary  and  confidential  technology,
inventions,  technical information,  biological materials and the like which are
owned or controlled by the party providing such  information or which that party
is  obligated to maintain in  confidence  and which is  designated  by the party
providing such information as confidential  ("Confidential  Information").  Each
party agrees to retain the other party's Confidential  Information in confidence
and not to disclose any such  Confidential  Information to a third party without
the prior written consent of the party providing such information and to use the
other party's Confidential  Information only for the purposes of this Agreement,
which  obligation  shall  terminate  five (5)  years  after  the  expiration  or
termination of this Agreement.

         2. The  obligations of  confidentiality  will not apply to Confidential
Information  which:  (i) was known to the receiving  party or generally known to
the public prior to its disclosure hereunder; or (ii) subsequently  becomes



known to the public by some means other than a breach of this Agreement;
(iii) is subsequently  disclosed to the receiving party by a third party having
a lawful right to make such  disclosure;  (iv) is required by law or BONA FIDE
legal process to be disclosed, provided that the party required to make
the disclosure  takes all  reasonable  steps to restrict  and  maintain
confidentiality  of such disclosure and provides  reasonable notice to the party
providing  the  Confidential  Information;  (v) is  approved  for release by the
parties; or (vi) is independently developed by the employees or agents of either
party  without any  knowledge of the  Confidential  Information  provided by the
other party.

         3.  Notwithstanding  the  foregoing  and  upon  notice  to  Subsidiary,
EntreMed shall have the right to disclose Confidential Information of Subsidiary
to a third party who  undertakes an obligation  of  confidentiality  and non-use
with  respect  to such  information,  at  least  as  restrictive  as  EntreMed's
obligation under this Section 6.

         SECTION 7.         - GENERAL PROVISIONS

         1. This  Agreement  sets forth the entire  agreement and  understanding
between the parties as to the subject  matter  thereof and  supersedes all prior
agreements in this respect.  There shall be no  amendments or  modifications  to
this Agreement, except by a written document which is signed by both parties.



         2. This  Agreement  shall be construed and enforced in accordance  with
the  laws of the  State of  Maryland  without  reference  to its  choice  of law

         3.  The  headings  in  this   Agreement  have  been  inserted  for  the
convenience  of  reference  only and are not  intended to limit or expand on the
meaning of the language contained in the particular article or section.

         4. Any delay in enforcing a party's  rights under this Agreement or any
waiver as to a particular  default or other matter shall not constitute a waiver
of a party's right to the future enforcement of its rights under this Agreement,
excepting  only as to an express  written and signed  waiver as to a  particular
matter for a particular period of time.

         5. Notices.  Any notices given pursuant to this  Agreement  shall be in
writing and shall be deemed to have been given and delivered upon the earlier of
(i) when  received at the address set forth  below,  or (ii) three (3)  business
days after mailed by certified or registered  mail postage  prepaid and properly
addressed,  with  return  receipt  requested,  or (iii) on the day when  sent by
facsimile  as  confirmed  by certified  or  registered  mail.  Notices  shall be
delivered to the respective parties as indicated:

                 To ENTREMED:               EntreMed, Inc.
                                            4610 Medical Center Drive
                                            Rockville, Maryland 20850
                                            Attn: President




                     Copy to:               Carella, Byrne, Bain, Gilfillan,
                                              Cecchi, Stewart & Olstein
                                            6 Becker Farm Road
                                            Roseland, New Jersey 07068
                                            Fax No. (201) 597-0250
                                            Attn: Donald S. Brooks, Esq.

                 To SUBSIDIARY:             Cytokine Sciences, Inc.
                                            4860 North Broadway
                                            Denver, Colorado 80216

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.

ENTREMED, INC.                                    CYTOKINE SCIENCES, INC.

By:  /s/ Carol Nacy                       By:  /s/ Dr. John Holaday
     ----------------------------------        -------------------------------
    Carol Nacy, Executive Vice President       Dr. John Holaday, President